Culture Shift

Technology and strategy are not the only important elements of BT's transformation story. The culture of the huge company had to change as well, and the IT organization was an important driver of this change, too. "We had 100 years of history to get rid of in two years, human processes embedded in the phone system," Ramji says. (The predecessors of the modern BT date back a century and a half, to the telegraph era; British Telecom was state-run until privatization in 1984.)

Under the old regime, IT workers were scattered across the enterprise, working in silos. "We needed to harmonize tribal behaviors," Rangaswami says. "Then we needed to change the culture of the people to one of genuinely servicing what the customer needs."

Rangaswami, an innovator in the use of Web 2.0 technologies at his previous job at an investment banking company and a well-known blogger himself, describes the emergence of a collaborative culture at BT. He says "a social network of sorts" evolved around the development of a messaging system built using open source software. "There was a democratization of the community, with peer respect and trust," he says. "It was identical to the kind of transformation we wanted to move to the rest of the firm."

The company also boasts 15,000 users of internal wikis on a given day, a huge number that Rangaswami says enables and bespeaks "a culture prone to sharing." BT has an active Facebook community of more than 9,000 members, which facilitates communication and cooperation across the old business units, and is seeing increased use of the Twitter microblogging service. "We are not being proscriptive about the use of these tools," Rangaswami says. "We use them, and we use face-to-face meetings, breakfasts and lunches and dinners to make the transformation happen. We have to talk to people, and we have to lead by example."

Managing director Nazi spent his pre-BT career at startups and came to the 21CN job from the company's global services unit. "As we reorganized, as we built this massive transformation, it was like that buzz at a startup," he says. "Everyone was looking at what we were building. You would hear software people speaking network and vice versa."

The change in culture and outlook is related to the change in technology. "The move away from thinking of hardware to thinking of software changes you," he says. "People see things more end to end now. They are thinking from a design perspective to the customer. These days, I sound like a software person."

The culture shift is evident in the marketplace. "Several years ago, discussing innovation at BT would have been a surprising conversation," analyst Bubley says. "They've realized they are allowed to experiment, they have taken risks and broken ground."

Still, nothing changes overnight, including the reputation of an ancient monopoly. "It would be wrong to characterize them as a company everyone loves," he says. "They still need to work on marketing, especially to consumers. They are not regarded as a cool, sexy company, but within the telecoms industry, they have earned a fair amount of grudging respect."